Canada Revenue can’t track money Canadian charities receive from foreign donors for religious and educational work, despite suspicions that millions may ultimately end up going to fund Islamist terrorist recruiting and propaganda.

It will be two, possibly three years, before any such “granular” details are available, Cathy Hawara, a Canada Revenue Agency director-general, told a Senate committee Monday.

Sen. Daniel Lang, chair of the national security and defence committee, was incredulous.

“Two or three years?!” he exclaimed.

“Yes, unfortunately,” replied Hawara.

Lang: “We’ve been told privately by some people within the intelligence service that there’s millions of dollars coming into this country. It’s a very legitimate question for the public and all agencies within the government to find out what’s going on. I would ask that we try to speed it up.”

It has been widely suspected for years that wealthy Gulf Arabs from Saudi Arabia, Kuwait and Qatar have been bankrolling conservative Wahhabi and Salafist institutions and teachings in western countries. The strict and puritanical interpretations of Islam have no direct links to terrorism. Still, security experts say the conservative ideologies offer fertile ground for individuals contemplating jihad.

Richard Fadden, the prime minister’s national security adviser, told the committee in April that money is coming into Canada to promote extremist ideology and much of it is going to religious institutions. That followed similar testimony to the committee by an imam who manages 13 mosques across the country.

“I think it’s fair to say, without commenting on the particular country of origin, there are monies coming into this country which are advocating this kind of approach to life,” said Fadden.

“A lot of these funds, I think, are directed to religious institutions or quasi-religious institutions. It’s very difficult in this country to start poking about, if you’ll forgive my English, religious institutions because of the respect that we have for freedom of religion.”

There are no restrictions on non-resident charitable donations coming into Canada, provided they are not from a banned terrorist organization. Most donations arrive by bank wires, which CRA does not have the ability to track because it does not have access to banking transactional records or money services business records.

Instead, non-resident gifts of more than $10,000 must be disclosed by the charities. Beyond that, however, Canada Revenue has no way of knowing how much of that money is directed to Islamic religious and educational programming.

“We know that that’s no ideal and we want to be able to collect better information and we’re looking at that actively now,” Hawara told the committee. (The agency is able to track foreign donations directed for political purposes and routinely audits the appropriateness of all charities’ activities and whether they support the organizations’ charitable objectives, among other things.)

The millions of dollars coming to Canada from wealthy Gulf states are for all sorts of purposes, including to support organizations that may ultimately be determined to be fronts for terrorist organizations, or affiliated with them, said Christine Duhaime, a leading expert on terrorist financing and money-laundering.

“It tends not to be funds directly sent to support overt acts of terrorism in large volumes (here). If we had that happening, terrorist groups in Canada would be more powerful and already causing damage to critical infrastructure. Yet, there is funding for so-called extremist purposes, including for terrorist propaganda.”

The 2014 federal budget committed $23 million over five years to modernize the IT system at the CRA’s charities directorate. The agency hopes the upgraded system will make it easier for charities to meet annual — and more detailed — reporting requirements, including specific activities foreign donations are directed for. It’s already recognized that charities offering service-type activities — health care, education, welfare — and which have geographical or cultural links to terrorism have a greater risk of involvement in terrorist financing.

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